In recent years real estate prices in Germany increased considerably. In this paper we analyze whether the recent rise can be justified fundamentally or whether it provides evidence for a price bubble. We do so by testing for a change in the data generating process from a process with a unit root to an explosive one. To take potential spillovers into account we do not restrict our analysis to administrative boundaries but use labor market regions. We find that even though price increases have been substantial over the last seven years, there is no evidence for wide spread excessive speculation in the German real estate market.